PCAST Sees Spectrum Sharing as Critical to Meeting U.S. Broadband Needs

"PCAST finds that clearing and reallocation of Federal spectrum is not a sustainable basis for spectrum policy due to the high cost, lengthy time to implement, and disruption to the Federal mission,” the report said (http://xrl.us/bnhkh2). “Although some have proclaimed that clearing and reallocation will result in significant net revenue to the government, we do not anticipate that will be the case for Federal spectrum.”

The spectrum crisis is an “illusion brought about because of the way spectrum is managed,” the report said. “If the Nation instead expands its options for managing Federal spectrum, we can transform the availability of a precious national resource -- spectrum -- from scarcity to abundance. This expansion can be done in such a way that it will not result in a loss of revenue to the Federal Government and may result in new revenue either from enhanced economic growth and innovation or from modest leasing fees.” The report downplays the contribution that auctions have made as a revenue source. It cites the 2006 AWS 1 auction, which brought in $13.7 billion for 90 MHz of spectrum. “Only half of the auctioned spectrum was Federal (the other half was already commercial), and the Federal agencies then required $1.5 billion over the next 6 years to relocate services out of the cleared bands,” the report said. “The Federal contribution of 45 MHz realized a net of just $5.35 billion. When this net revenue is annualized over 10 years or more, the typical duration of a license, the amount of revenue the Federal Government will receive is small. These modest sums should not be driving the direction of spectrum policy."

The government should create “the spectrum equivalent of wide multi-lane superhighways, where the lanes are continuously shared by many cars, trucks, and other vehicles,” PCAST said. Users would share spectrum “just as vehicles share a superhighway by moving from one lane to another,” the report said. “In contrast to the way we have allocated spectrum, the road system has always let Federal and commercial vehicles share the same highways, with the proviso that government use was allowed to preempt commercial users’ rights for reasons of public safety, emergency medical rescue, or national security. There is no reason that the same principles cannot apply to spectrum management.”

The Commerce Spectrum Management Advisory Committee is already working through various issues around federal/commercial sharing of spectrum (CD May 31 p1). Unlike PCAST, CSMAC is made up of spectrum experts with a long history in the telecom industry. It’s still unclear whether Republicans in Congress and a Republican administration, if the GOP retakes the White House, would endorse the new spectrum paradigm (CD June 25 p1).

The Department of Defense, which had fought hard against reallocation of 1755 MHz spectrum, was represented at the event by Chief Information Officer Teri Takai. DOD by most accounts played a key role in keeping a requirement that 1755-1780 MHz be reallocated for commercial use out of the February spectrum law. PCAST’s efforts on the report “have really furthered the critical dialogue in how we meet the nation’s broadband needs, and we greatly appreciate their efforts and their thoughts,” Takai said. “Military spectrum requirements are diverse and complex, given the variety of missions that the department must support around the world. DOD uses federally allocated and regulated spectrum assignments for command and control operations, communications, intelligence and target acquisition on land, at sea, in the air and in space.” Within the U.S., spectrum is critical so the armed forces “properly train as we might fight,” she said.

NTIA Administrator Larry Strickling and FCC Chairman Julius Genachowski endorsed the administration’s new thinking on spectrum. “I'm particularly pleased that this panel of experts has now validated what we at NTIA have been saying for the past year, that we have to find a new way of making spectrum for commercial broadband and that the new way has to embrace the sharing of spectrum between federal agencies and the commercial industry,” Strickling said: “The old method” of clearing spectrum for exclusive use by carriers “just isn’t sustainable any longer.” The federal government “has already moved the easy stuff,” Strickling said. “To continue this old method of spectrum allocation costs too much money and takes too much time."

"We're here because our success around mobile is creating enormous new challenges,” Genachowski said. “Demand for spectrum is increasing exponentially, and increasing far beyond what anyone had previously anticipated, and increasing in the U.S. before it’s increasing at these rates anywhere else in the rest of the world.” The U.S.’s traditional strategy “has been to clear spectrum and reallocate it,” and that strategy should remain in place where possible, he said. “But in order to keep pace with our nation’s broadband demands, we also need to develop new tools to supplement the old ones. Spectrum sharing is one such tool."

"The demand for mobile broadband is growing at a breathtaking pace,” said Commissioner Jessica Rosenworcel, also attending the report’s unveiling. “So the pressure is on to find new and innovative ways to manage our spectrum resources. The creative thinking in today’s report ... is a good place to start.” But the FCC’s two Republicans were less enthusiastic.

"Sharing is an ill-defined concept and is far from being a panacea,” Commissioner Robert McDowell said in an interview Friday. “What we need is stronger leadership within the federal government to have it relinquish spectrum for auction. The National Broadband Plan calls for releasing 500 MHz over 10 years, now that’s seven and three quarters years, and we're not going to meet that goal. If we are left only talking about sharing, critical need will be unmet and America’s global competitiveness will be severely undermined."

Commissioner Ajit Pai questioned some of the report’s conclusions. “I have serious concerns about the report’s apparent dismissal of clearing and reallocating federal spectrum for commercial use,” he said. “To be sure, geographic spectrum sharing has its place -- all reasonable means of making more spectrum available for commercial use do. But I continue to believe that clearing federal spectrum bands and reallocating them for exclusive commercial use is a critical component of any sensible spectrum strategy. Although initiatives to repurpose federal spectrum for commercial use have ground to a virtual standstill recently, now is not the time to wave the white flag. Rather, we must reinvigorate our efforts to reallocate additional federal spectrum for mobile broadband use."

Officials from free-market oriented groups expressed strong reservations about the PCAST report. Fred Campbell of the Communications Liberty & Innovation Project, a Wireless Bureau chief under then-Chairman Kevin Martin, said the report is “old-school centralized government planning at its very worst.” Auctions work, Campbell said. “The use of real currency through market-based incentive auctions would be more efficient technically and economically than a system reliant on the judgment of government planners regarding future wireless innovation and growth strategies,” he said. “An executive order implementing these recommendations would also implicate the separation of powers by dictating the terms of commercial spectrum use absent Congressional authority."

"I recognize there may be a role for government and private sector spectrum sharing in addressing the nation’s spectrum crunch,” said Free State Foundation President Randolph May. “But the PCAST report is disappointing in that it seems to give up on the notion of reallocating underutilized federal spectrum. Working out sharing arrangements in practice is never as easy as working them out on paper, whereas exclusivity rights create incentives for the most efficient utilization of a scarce resource. I think the President has failed to exercise as much leadership as he could with respect to the federal agencies relinquishing underutilized spectrum."

CTIA also questioned the move to sharing. “Cleared spectrum and an exclusive-use approach has enabled the U.S. wireless industry to invest hundreds of billions of dollars, deploying world-leading mobile broadband networks and resulting in tremendous economic benefits for U.S. consumers and businesses,” said Vice President Chris Guttman-McCabe. “Not surprisingly, that is the very same approach that has been used by the countries that we compete with in the global marketplace, who have brought hundreds of megahertz of cleared spectrum to market in recent years."

"The report fails to recognize the benefits of exclusive use licenses, which are well known,” said AT&T Vice President Joan Marsh. “Those licenses enabled the creation of the mobile Internet and all of the ensuing innovation, investment and job creation that followed."

Public Knowledge said the report incorporates many of the arguments the group has made on the future use of spectrum. “The path to sustainable spectrum growth must take advantage of our power to innovate and our leadership in open spectrum technologies such as Wi-Fi and Super Wi-Fi,” said Senior Vice President Harold Feld. “For too long, policymakers and industry lobbyists have quarreled over whether to embrace more exclusive licensing or spectrum sharing as if a gain for one means a loss for the other. We are happy the PCAST report rejects this false choice that has deadlocked our spectrum policy for too long."

Lawmakers generally commended the report’s emphasis on better spectrum sharing relationships between federal agencies and the private sector. Senate Commerce Committee members John Kerry, D-Mass., and Olympia Snowe, R-Maine, said the report “wisely shows how we can prioritize users in sharing spectrum intelligently, the same way cars on a highway share lanes,” in a joint press release. “It doesn’t have to be an either/or choice. Sharing government spectrum across sufficiently large bands could unleash immense and productive economic activity without hindering the operations of government,” they said. Snowe and Kerry are co-sponsors of the Reforming Airwaves by Developing Incentives and Opportunistic Sharing (RADIOS) Act which directs the FCC and NTIA to identify and inventory spectrum sharing opportunities between federal agencies and the private sector.

House Communications Subcommittee Ranking Member Anna Eshoo, D-Calif., commended the forward-thinking analysis and its proposal for a “new hierarchy” of how spectrum is used, in a press release. Eshoo said she was particularly excited that the report embraces spectrum sharing, incentivizes federal agency buy-in, builds on existing technologies and emphasizes areas for immediate action. Rep. Doris Matsui, D-Calif., said the report provides “key recommendations on spectrum sharing, incentives for federal agencies to share spectrum, and supports international harmonization of shared federal bands,” in a separate press release. “It is clear that all stakeholders, including the federal government and the commercial industry, need to work closely together to find common ground and move towards repurposing underutilized federal spectrum for commercial use and innovation,” she said.